Cognizant to Pay $25 Million to Settle Bribery Claims
16 February 2019 - 5:17AM
Dow Jones News
By Samuel Rubenfeld and Dave Michaels
Two former executives of Cognizant Technology Solutions Corp.
were charged by U.S. authorities with foreign bribery for allegedly
approving illicit payments in India to build a corporate campus
there.
The Teaneck, N.J.-based company also agreed to pay $25 million
to settle with U.S. authorities.
Gordon Coburn, the company's former president, and Steven
Schwartz, its former chief legal officer, were charged in a
12-count indictment returned Thursday by a federal grand jury in
New Jersey, prosecutors said. The two men authorized a $2 million
bribe to at least one government official in India to secure
permits necessary for the construction of an office campus in India
to support about 17,000 employees, prosecutors said.
"The allegations...describe a sophisticated international
bribery scheme authorized and concealed by C-suite executives of a
publicly-traded multinational company," Brian A. Benczkowski, an
assistant attorney general, said in a statement.
They were charged with three counts of violating the Foreign
Corrupt Practices Act, as well as seven counts of falsifying books
and records, a count of circumventing accounting controls and a
conspiracy count.
The FCPA, which is jointly enforced by the Justice Department
and the Securities and Exchange Commission, prohibits the use of
bribes to government officials to get or keep business.
The two men were also sued in a civil complaint by the SEC,
which seeks permanent injunctions, monetary penalties and
officer-and-director bans against them.
Hank Walther, an attorney for Mr. Coburn, said he's disappointed
that U.S. authorities chose to pursue the allegations. "Mr. Coburn
intends to vigorously fight all charges," he said.
A lawyer for Mr. Schwartz didn't immediately respond to requests
for comment.
Prosecutors also on Friday announced that they declined to
prosecute the company, citing Cognizant's self-disclosure of the
allegations, as well as its cooperation and remediation.
Cognizant settlement includes $19 million in disgorgement and a
$6 million civil penalty, to the SEC to resolve the agency's
claims.
Cognizant said it was pleased to resolve the case, citing its
voluntary self-disclosure, internal investigation and cooperation.
"It is important to note that this entire matter did not involve
our work with clients or affect our ability to provide the quality
services our clients expect from us," said Francisco D'Souza, the
company's vice chairman and CEO, in a statement.
Shares in Cognizant traded at $73.27 on Friday, a 0.21% increase
over Thursday's closing price, according to FactSet.
Write to Samuel Rubenfeld at samuel.rubenfeld@wsj.com and Dave
Michaels at dave.michaels@wsj.com
(END) Dow Jones Newswires
February 15, 2019 13:02 ET (18:02 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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